The Gaggle on Insurance and Retirement Solutions

Avoid Medicare Late-Enrollment Penalties

  

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Most people know that when they turn 65, they may be eligible to enroll into Medicare. A big part of what we do at Blue Goose is help people understand the process and make sure they receive the best coverage available. What some people are not aware of is that there are late-enrollment penalties added to the premiums of individuals who don’t enroll into Medicare when they are first eligible for the program. See below for penalty guidelines specific to each part of Medicare, and avoid having to pay increased premiums for coverage.

Part A: If you are not entitled to receive Part A of Medicare and you do not purchase it when you are first eligible, your monthly premium may go up 10%. You pay this penalty for twice the number of years you could have enrolled in Part A but didn’t. For example, if you waited two (2) years to enroll in Part A after you were first eligible, you would pay an increased premium for a total of four years. 

Part B: Often times if you are entitled to Part A, you will be enrolled in Part B as well. If you choose to opt out of Part B when you are first eligible, you could face a 10% increase in premium for each 12-month period you could have had Part B but didn’t. Note: If you are covered by a group health plan based on current employment, you will be issued a Special Enrollment Period (SEP) should that coverage end and you need to enroll in Part B of Medicare. Usually you don’t pay a penalty if you sign up during a Special Enrollment Period.

Part C: There is no late-enrollment penalty for Part C of Medicare, however, you must enroll during certain enrollment windows.

Part D: Just like the other penalties, you may have to pay an increased premium for Part D of Medicare if you don’t enroll in it when you are first eligible, and did not have another form of creditable prescription drug coverage (such as an employer group drug plan). Also, if you go 63 or more consecutive days without being enrolled in a Prescription Drug Plan, you may face an increased premium penalty when you re-enroll in a Part D plan. The penalty is calculated by multiplying the “national base beneficiary premium” ($31.08 in 2012) times the number of full, uncovered months you were eligible but not enrolled in a Medicare Prescription Drug Plan or other creditable coverage. You pay this penalty for as long as you are enrolled in a Prescription Drug Plan.

Keeping track of all the enrollment guidelines can be complicated. Blue Goose agents sit down with Medicare beneficiaries every day and help them understand the process and avoid late-enrollment penalties. Are you paying an increased premium for late-enrollment? 

Watch our Medicare in 2 minutes video to figure out what all these parts mean!